Text size
Magellan Midstream Partners
unit holders have approved the pipeline company’s $19 billion merger agreement with Oneok, the company said at a special shareholder meeting held Thursday morning.
The deal, which is due to close before the market opens on Sept. 25, will unite two of the country’s largest energy pipeline operators. The merger deal, reached in mid-May, generated opposition from Magellan holders who were unhappy with the prospect of a large tax bill and those who questioned the strategic merit of the transaction.
But unit holders backed Magellan management, which argued the deal offered a sizable premium to unit holders and would create a more diversified and stable business.
In a news release, the companies said that preliminary results of the Magellan Special Meeting of Unitholders, showed that approximately 76% of the common units voted, or 111.2 million units, were cast in favor of the merger. That resulted in 55% of outstanding units voting in favor.
Oneok
holders overwhelmingly backed the transaction.
Magellan Midstream Partners units (ticker: MMP) were down 0.1% to $69.02 on Thursday morning, while Oneok (OKE) slipped 1.3% to $66.13 in the wake of the news. Magellan is trading in line with the deal value, which Barron’s calculated at about $69.10 per unit.
Oneok is offering 0.667 of its units and $25 a share in cash for each Magellan unit. Magellan units traded around $55 before the deal was announced.
The merger needed the approval of a majority of the Magellan outstanding units, and the company narrowly cleared that hurdle with 55% of the units approving the deal. A non-vote effectively amounted to a no vote.
Magellan overcame opposition from one large institutional holder, Energy Income Partners, which held 3% of the units.
Write to Andrew Bary at [email protected]
Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.